LONDON (Alliance News) - FTSE 100 index bounced back to over 7,000 mark at midday on Wednesday after a sharp fall in Tuesday's session, with
Barclays among the gainers."European markets are on the rise this morning, with the somewhat stabilising session overnight providing less emphasis towards the risk-off sentiment that dominated yesterday. The fears over the potential breakdown in Italy has certainly been a major drag on sentiment of late, and with the Italian FTSE MIB falling once more, it is clear that markets remain pessimistic for any positive resolution," said IG analyst Joshua Mahony.The FTSE 100 was up 0.8%, or 50.96 points, at 7,006.17 by midday, going back to over 7,000 mark after closing 6,955.21 on Tuesday.The mid-cap FTSE 250 was 0.6% higher, or 123.44 points, at 18,475.56. The AIM All-Share was up 0.1% at 977.94.The Cboe UK 100 was up 0.6% at 11,886.73, while the Cboe UK 250 was up 0.5% at 16,722.10. The Cboe UK Small Companies was flat at 11,560.03.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.7% and 0.3%, respectively.The European Commission on Tuesday took the unprecedented step of ordering Italy to revise its public spending plans.Italy's debt load is the second-highest in Europe, after Greece, and there are worries that losing control of spending could rekindle financial turmoil in Europe. The populist Italian government says the sharp increase in spending is needed to jump-start growth after years of malaise."We see no alternative but to request the Italian government to revise its draft budgetary plan," EU Commission vice president Valdis Dombrovskis said.The EU Commission said it had no choice after Italy proposed a deficit of 2.4% of GDP for next year - three times more than what it had previously targeted.The euro was quoted at USD1.1413 at midday compared to USD1.1483 at the London equities close on Tuesday. The Eurozone economy grew at the slowest rate for over two years in October as an export-led slowdown continued to broaden-out to the service sector, survey data from IHS Markit showed.The composite output index declined to 52.7 from 54.1 in September. The expected score was 53.9. Nonetheless, a reading above 50 indicates expansion.The services Purchasing Managers' Index came in at 53.3, down from 54.7 in September and below the forecast of 54.5.At the same time, the manufacturing PMI fell more-than-expected to 52.1 from 53.2 in September. Economists had forecast a reading of 53.0.In addition, Germany's private sector expanded at the slowest pace for almost three-and-a-half years in October with both the manufacturing and service sectors showing notable losses of momentum, flash data from IHS Markit said.The composite output index fell to a 41-month low of 52.7 from 55.0 in September. The score below its long-run average of 53.4 reflected weaker increases in both services and manufacturing output.The flash services Purchasing Managers' Index came in at 53.6 versus 55.9 in the previous month. The expected reading was 55.5.At the same time, the flash manufacturing PMI dropped more-than-expected to 52.3 from 53.7 a month ago. Economists had forecast the reading to fall to 53.4.In the UK, the pound was quoted at USD1.2906 at midday versus USD1.2982 late Tuesday, at lows not seen since the start of September.UK mortgage approvals declined to a 6-month low in September, monthly data from UK Finance showed. The number of loans approved in September fell to 38,505 from 39,241 in August. This was the lowest since March.Gross mortgage lending across the residential market fell about 1.2% from last year to GBP21.5 billion. The GBP10.0 billion of credit card spending in September was 3.4% higher than last September.Meanwhile, UK house price inflation is expected to soften in 2019, as changing migration and rental market trends put pressure on London and the South East in particular, Moody's Investor Service predicted.Moody's attributed the price slowdown to net migration, which is expected to be lower in 2019.The region of London and the South East are said to be more sensitive to migration changes than other UK regions, due in part to having the highest negative migration pressure, meaning the intent to emigrate exceeds the intent to immigrate.Moody's base case assumes a negotiated Brexit deal with low house-price inflation rates of 2% to 3% over the medium term. However, should a no-deal Brexit take place, the macroeconomic outlook for the UK would be weaker, leading to outright declines in national house prices.Moving to the UK company news,
Barclays was up 2.7% as it reported a rise in third quarter profit but year-to-date profit remained lower, dragged by litigation costs and conducts charges experienced earlier in the year. For the three months ended September, Barclays pretax profit increased to GBP1.46 billion from GBP1.11 billion in the third quarter of 2017. The improvement was led by Barclays' investment bank, which helped the Barclays International division to a 30% rise in profit. The group raised its third quarter dividend to 2.5 pence from 1.0p paid a year before. Barclays reiterated its intention to pay a total dividend of 6.5p for 2018.
International Consolidated Airlines Group was up 2.0% after Deutsche Bank raised is rating on European Airlines sector to Overweight from Underweight.
easyJet was up 1.6%.At the other end of FTSE 100,
Fresnillo was the worst performer, down 2.1%. Fellow gold miner
Randgold Resources was down 1.7%.Fresnillo said gold production in the three months to the end of September 30 declined by 3.5% to 225,000 ounces, while silver production increased by 6.3% year-on-year to 15.5 million ounces. However, Fresnillo said third-quarter silver production was not as high as anticipated and reduced its annual guidance for silver output to between 62.0 million and 64.5 million ounces from 64.5 million to 67.5 million ounces estimated earlier. Fresnillo now expects to produce between 920,000 and 940,000 ounces of gold in the full year, up from 900,000 to 930,000 ounces guided previously.
Antofagasta was down 0.8%. For the nine months to September-end, copper production fell 4.0% to 505,500 tonnes from 526,500 tonnes the year ago. Gold production dropped 30% to 120,100 ounces from 171,800 ounces.For the full-year, the miner now expects to produce between 705,000 and 725,000 tonnes of copper. At the end of July, it anticipated copper output in a range of 705,000 to 740,000 tonnes.Before the US open are results from carmaker Ford and telecommunications firm AT&T. Software giant Microsoft will report earnings after the close. The US has identified some of the individuals who killed journalist Jamal Khashoggi and is looking to apply sanctions against them, including people who work for the government of Saudi Arabia, Secretary of State Mike Pompeo said. "We have identified at least some of the individuals responsible, including those in the intelligence services, the royal court, the Foreign Ministry and other Saudi ministries who we suspect to have been involved in Khashoggi's death," Pompeo said. "We are taking appropriate actions, which include revoking visas," said Pompeo, who last week visited Saudi Arabia and Turkey. US President Donald Trump meanwhile blasted the Saudi cover-up of the killing of the Washington Post columnist at the country's consulate in Istanbul on October 2 as "the worst cover-up ever".Wall Street is pointed towards a lower open on Wednesday. The Dow Jones is called down 0.6%, the S&P 500 down 0.6% and the Nasdaq down 0.8%.
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